Unlawful phoenix activity has been a subject of much consideration and recommendation over the years, with most recommendations ignored, and some perhaps properly so – a similar names law was never going to work – but most just waiting for government action. Major recommendations are imminent from the team of Melbourne academics.
Getting the government to act on recommendations is difficult, with politics behind many an inaction or perverse action.
One thing that has been considered but not in any detail, less so recommended, is the disclosure of unpaid tax liabilities through the credit reporting services. Yet that is the reform the government has announced. No mention is made of any of the other more worthy measures that could be taken to limit phoenix activity. Nor what considerations support the rather dramatic exception to the long time policy of tax confidentiality.
As well, the Senate Economics References Committee is conducting three relevant inquiries
- the non-payment of employees’ superannuation by employers;
- criminal, civil and administrative penalties for white collar crime; and
- corporate tax avoidance.
Then there is the Standing House Committee inquiry into “how taxpayers, particularly individuals and small businesses, engage with Australia’s tax system …”; a further inquiry into shark deterrence measures; and recommendations about the recovery of tax debts from the Inspector-General of Taxation and the ANAO.
The report from the Melbourne academics is pending, but we do have a good idea that they support the use of credit reporting.
Apart from Melbourne, none of the other inquiries have formally recommended the credit reporting of tax debts. It may be a good idea, but in view of its lightweight entry on the scene, we may find there are unintended consequences and unanticipated legal and logistical problems. Hopefully Treasury and the ATO have given it close analysis.
It is not the best way to proceed with law reform but it is typical, and at least a decision has been made.